At The Upturned Table: How the fragile Iran-US agreement turned out to be bad news for Putin

The agreement between Iran and the US undoubtedly reflects a partial defeat for Donald Trump in the latest conflict. The reopening of the Strait of Hormuz appears to have been his principal objective, while all other aspects of the arrangement have been deferred to a subsequent phase and may ultimately never be realised. At the same time, the concessions made by the US do not appear particularly substantial, while further steps, including sanctions relief and the unfreezing of Iranian assets, have been made conditional on progress in future negotiations.

For now, however, the negotiating process provides an opportunity for a pause in the confrontation, something both sides have an interest in securing. For Iran, it offers a way out of the maritime blockade and an opportunity to resume oil exports without yet making any fundamental concessions. For Donald Trump, it helps to reduce oil prices, while allowing the United States and its regional allies to prepare for a possible new round of military confrontation.

Trump’s strategy towards Iran over the past year and a half has consisted of alternating periods of maximum economic and military pressure with coercion and efforts to compel Tehran into negotiations. A new phase of escalation therefore appears highly likely in the future. At the same time, despite what may be viewed as a symbolic victory, Iran's position has been significantly weakened by sanctions pressure, two military campaigns and the domestic political instability of recent years. This may increase internal pressure in favour of serious negotiations and compromise.

For the time being, Vladimir Putin, who had previously been regarded as the main beneficiary of the war in Iran, appears to be the main loser from the signing of this fragile agreement. The agreement has driven down oil prices at a time when the Russian government has further expanded its spending. Relations between Putin and Trump have clearly cooled, while the latter's interest in closer cooperation with European leaders has, by contrast, increased. A return of Russian-American relations to the trajectory seen in 2025 now appears almost inconceivable, although the Kremlin has made clear that it would welcome such an outcome.

Finally, the G7's joint statement on Ukraine, the first since Trump's return to the White House, reflects not only a common position but also explicitly refers to the need to provide Ukraine with long-range weapons. While the path from declaration to implementation may prove difficult, the statement itself removes an important political obstacle to Ukraine's transition to a new status as a military power.

What is and is not in the Iranian ‘memorandum’

The agreement with Iran, signed recently by Donald Trump, is undoubtedly evidence of his partial defeat in the war. The principal focus and most tangible achievement of the arrangement appears to be the temporary reopening of the Strait of Hormuz for a period of 60 days. By contrast, the parameters of a nuclear agreement are set out only in highly vague terms, while questions relating to Iran's missile programme and its regional proxy forces are not mentioned at all, despite the fact that these three issues were repeatedly cited as the causes of the war. In exchange for the temporary reopening of the strait, the United States is lifting its maritime blockade of Iran and undertaking to issue exemptions, effectively licences, for Iranian oil exports while negotiations continue.

This, however, is essentially the extent of the document’s conciliatory undertones. An earlier version, published by the Iranian news agency Mehr on 15 June, looked almost like a US capitulation and was widely interpreted as such within Iran. The final version differs substantially. Although the content of the individual provisions remains broadly similar, the Iranian draft presented these measures as unconditional US commitments that would take effect immediately or shortly after signature. In the final version, by contrast, they form part of a process distributed over time, creating mutual contingency between the various elements of the agreement.

Overall, the document, titled the ‘Memorandum of Understanding’, establishes a framework for negotiations that are expected to culminate within 60 days, or potentially longer, in the signing of a final agreement. The process unfolds across several time horizons: first, actions that take effect immediately following signature of the memorandum; second, measures to be implemented within 30 days; third, provisions linked to the signing of a final agreement; and fourth, steps that take effect 30 days after that agreement enters into force. This complex sequencing is the source of the principal differences between the Mehr draft and the final text. For example, the draft states that the US will begin withdrawing its military forces from the region 30 days after the memorandum is signed, whilst the final version states that the withdrawal of troops will take place 30 days after the final agreement is concluded. This is a fundamental difference.

The memorandum outlines the general framework of the 90-day process as follows. The parties agree to cease all military operations, including in Lebanon, although the feasibility of this provision remains questionable. The United States ends its maritime blockade of Iran, while Iran lifts restrictions on navigation through the Strait of Hormuz, permitting all vessels to transit free of charge for a period of 60 days. At the end of that period, Iran will consult with Oman and determine future arrangements for managing the strait. In other words, it does not commit to restoring the previous status quo and continues to assert its sovereignty over the waterway. The parties will also discuss mechanisms for verifying Iran's commitment to forgo a military nuclear programme and will jointly undertake the dilution of existing enriched uranium stockpiles. In parallel, they will negotiate the mechanisms and guarantees required for lifting sanctions and unfreezing Iranian assets. In addition, the United States is to develop a reconstruction plan for Iran valued at no less than $300 billion. This does not, however, imply that Washington will provide these funds directly. The provision bears some resemblance to Trump's earlier proposals concerning the development of Ukraine's rare earth resources, the creation of a Russian-American energy partnership, or the transformation of Gaza into a garden city.

A meaningful pause

The signed agreement, which is the result of a compromise not only between the US and Iran but also from internal compromises within the Iranian leadership, leaves considerable ambiguity regarding the interdependence of obligations at different stages of the negotiating process. This is particularly true with respect to the sequencing of a nuclear deal, sanctions relief and the unfreezing of Iranian assets. For this reason, the agreement could be abandoned by either side at almost any stage. In this sense, the eventual outcome will depend less on the wording of the document itself than on the evolving balance of power that shapes each side's incentives to continue negotiations and its ability to defend particular positions. The memorandum is, in effect, an open-ended framework that can be closed at any moment. Nevertheless, it clearly marks a departure from the language of ultimatum with which Trump began the current phase of his Iran policy.

In practical terms, much like the negotiating process of the past month, the agreement creates the conditions for a pause that both sides need, albeit for different reasons. For Iran, it provides relief from the maritime blockade and an opportunity to generate revenue from oil exports. For Trump, the pause is valuable, first, because it effectively lowers oil prices. During negotiations on the memorandum, prices fell below $100 per barrel and, following its signature, dropped below $80. Second, it gives the United States and its regional allies time to correct the shortcomings exposed during the previous military campaign, when the underestimation of Iran's missile and drone capabilities led to the depletion of traditional and extremely costly air defence systems. Third, the pause creates space for developments within Iran itself, whose military, economic and political infrastructure has been seriously weakened by two military campaigns and repeated episodes of political instability, despite official celebrations of a symbolic victory. In essence, the latest conflict produced a form of asymmetric defeat in the latest war.

Furthermore, a closer examination of the Iran track during Trump's second term reveals a pattern of alternating phases of maximum pressure and military escalation, in January-March 2025, June 2025 and February-April 2026, followed by phases of invitation and coercion into negotiations, in April-May 2025, August-September 2025 and May-June 2026. The periods of pressure have been designed to exhaust Iran economically, politically and militarily, while the diplomatic phases have sought to strengthen the position of the more moderate wing of the Iranian leadership. When discussing Iran's symbolic victory in temporarily holding global trade through the Strait of Hormuz hostage, it is worth remembering that Iran itself, after two military campaigns and the destruction of much of its military and political leadership, is no longer the same power that confronted Trump when he first entered office.

Therefore, the signed document should not be understood as a capitulation but rather as a retreat. It may be interpreted as a forced abandonment of positions, yet it could ultimately prove to be more of a tactical manoeuvre than a rout. At the same time, it is also an invitation. After all, exactly half of the Islamic Republic's 46-year existence under its two uncompromising Supreme Leaders, Ruhollah Khomeini and Ali Khamenei, has been spent pursuing a military nuclear programme while operating under foreign sanctions. The outcome of that struggle does not appear especially impressive, nor does the legitimacy of the clerical regime appear particularly robust, either internationally or domestically.

Worse than under Biden

When, by mid-March, it became clear that the military campaign in Iran had reached an impasse, it was commonly said that Vladimir Putin had emerged as the main beneficiary of Trump’s failed war. In fairness, it should now be said that Putin appears, at least for the moment, to be among the principal losers from the signing of the Iranian-American memorandum.

The most obvious factor is, of course, oil prices. If the agreement survives, which remains uncertain, the entire negotiating period is likely to keep oil prices under downward pressure. Although prices are unlikely to return to pre-war levels, revenues from Russian crude, particularly given the discount applied to Urals exports, will be considerably lower than Moscow would prefer. Meanwhile, during the brief period of elevated prices, the Russian government managed to increase spending further, effectively consuming much of the windfall generated by the conflict. As a result, Russia's fiscal position remains highly strained.

Second, relations between Putin and Trump appear to have cooled noticeably during the Iranian crisis. More precisely, Trump's perception of Putin seems to have changed. From one perspective, Putin undoubtedly took satisfaction in the difficulties faced by Trump's ally in the Iranian theatre and appears to have offered Tehran limited support. From another, Russia's own military setbacks have left Putin looking less formidable than he did a year ago. It is telling that Trump reacted rather reservedly to Putin’s birthday call, whilst Putin’s adviser Yuri Ushakov spoke at length about the warm conversation and the deep relationship between the two leaders. Ushakov also noted that Moscow expected visits from Steve Witkoff and Jared Kushner in the near future. He had made a similar reference a month earlier, yet on both occasions Washington offered little meaningful response. Moscow would clearly like to return to the trajectory of 2025, but that trajectory no longer appears popular in Washington.

Finally, the joint G7 communiqué on Ukraine came as a major blow to Moscow (just before the fiery events in Kapotnya). For the first time since Trump's return to the White House, it articulated a common position grounded largely in the European approach. This represents a significant shift in the dynamics between the United States, its G7 partners and Russia. The explanation lies not only in Donald Trump's changing view of Putin but also in a broader shift in the balance of power. First, a less confident Trump now has a greater need for the support of European leaders. He requires their backing both for the negotiating process and for any potential future confrontation with Iran. The price of that support is, inevitably, his position on Ukraine. Second, the informal understanding between Trump and Putin, two leaders who previously sought to shape the future of Europe and Ukraine without consulting either, has proved both fragile and largely unproductive. By contrast, what appeared a year ago to be an alliance of weakness, namely the partnership between Europe and Ukraine, has demonstrated considerably greater resilience and effectiveness. The changing balance on the battlefield in the Russo-Ukrainian war reflects this reality. The question of who truly holds the stronger hand now appears, at the very least, open to debate.

These shifts have produced tangible political consequences. The significance lies not only in the emergence of a joint US-G7 statement on Ukraine, but also in its substance. The G7 expressed unity in supporting Ukraine, in strengthening economic pressure on Russia, and in providing urgent assistance in the form of air defence systems, long-range weapons and licences for their production. This last point is particularly significant. Even under President Biden, no explicit political decision to provide Ukraine with long-range strike capabilities was formally adopted or publicly declared. While implementation may still prove difficult and time-consuming, the declaration itself removes an important political barrier to Ukraine's evolution into a more capable military power.

In a curious twist, developments at the G7 summit resemble a return to the long-forgotten ‘Kellogg Doctrine’, associated with Trump's former adviser on the Russia-Ukraine conflict. Formulated in late 2024, the doctrine argued that peace in Ukraine required pressure on both sides. Pressure on the Kremlin was to consist of two complementary elements: increased pressure on Russian oil exports and the threat of providing Ukraine with progressively more powerful weapons, thereby convincing Putin that military victory was unattainable. Although Kellogg lost influence and ultimately departed in November 2025, Trump began implementing the first element of this approach at around that time. Seven months later, attention appears to have shifted to the second.

Whatever the precise interpretation, a return to the trajectory of 2025, which the Kremlin still appears to favour judging by Ushakov's remarks, now seems highly improbable following the G7 communiqué. And Vladimir Putin risks finding that, having lost his ‘strongman’ image, he is increasingly slipping into the ranks of those seeking to emulate the Iranian ayatollahs.